Employee Benefits
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Fees versus commission
Having taken out numerous policies following an ever-changing lifestyle, Mr. B has recently tried to make some alterations. However, when he tried to transfer his pension, there were penalties. When he tried to surrender his endowment, he would not receive the full value of the policy. The savings plan he took out a year ago is worth less than he put in. And when he had a meeting with a representative from his bank recently, the advice was to take out more policies.
By talking to Ovation, Mr. B would be sure that a review of his circumstances would be impartial, and that because he was paying a fee, the solution could be to not make any changes, as well as to make changes.
In practice, some changes can be made to rectify the situation – if the funds in the endowment were really needed, then selling, rather than surrender, could be an option. Certain life assurance policies can be re-written with a cheaper premium because the commission would be rebated. Moreover, future savings and pensions would be made with lower charges due to the rebated commission, and Mr. B would have a long-term adviser.